In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to shift the
A) short-run aggregate supply curve to the left.
B) aggregate demand curve to the right.
C) short-run aggregate supply curve to the right.
D) aggregate demand curve to the left.
E) long-run aggregate supply curve to the left.

Question

Quizplus · Accepted Answer

An increase in consumer optimism leads to an increase in consumer spending, which in turn leads to an increase in aggregate demand. Therefore, the initial impact of an increase in consumer optimism is to shift the aggregate demand curve to the right.

In the Model of Aggregate Demand and Aggregate Supply, the Initial